Dollar Rallies On Stronger T-Note Yields And Weak Stocks
The dollar index (DXY00) on Friday rose +0.261 (+0.28%). EUR/USD (^EURUSD) fell -0.0037 (-0.31%). USD/JPY (^USDJPY) rose +0.18 (+0.16%). The dollar index on Friday climbed to a 3-1/2 week high. Higher T-note yields on Friday supported moderate gains in the dollar along with weakness in stocks, which fueled some liquidity demand for the dollar.
EUR/USD (^EURUSD) on Friday dropped to a 3-1/2 week low. The euro came under pressure Friday on speculation the ECB will maintain record-low interest rates for longer after the ECB said that a Financial Times report published Thursday "that a lift-off of interest rates could come already in 2023 is not consistent with our forward guidance."
USD/JPY (^USDJPY) on Friday posted moderate gains. The yen retreated Friday on higher T-note yields after the 10-year T-note yield rose to a 2-month high of 1.384%. The yen was also under pressure Friday from strength in Japanese stocks, which reduced the safe-haven demand for the yen after the Nikkei Stock Index on Friday closed up +0.58%.
Friday’s U.S. economic data was bearish for the dollar. The University of Michigan U.S. Sep consumer sentiment rose +0.7 to 71.0, weaker than expectations of 72.0.
December gold (GCZ21) on Friday closed down -5.30 (-0.30%), and Dec silver (SIZ21) closed down -0.457 (-2.00%). Precious metals on Friday moved lower, with silver falling to a 1-1/4 month low. A rally in the dollar index on Friday to a 3-1/2 week high was bearish for precious metals. Gold prices were also undercut Friday by higher global bond yields after the 10-year German bund yield rose to a 2-1/4 month high and the 10-year T-note yield rose to a 2-month high.
The dollar and gold have continued safe-haven support from concern the worldwide spread of the delta Covid variant will crimp the global economic recovery. The 7-day average of new U.S. Covid infections rose to a 7-1/2 month high Monday of 171,850.
Dollar Rallies On Stronger T-Note Yields And Weak Stocks (barchart.com)
